May 20, 2010

Passionate about music and entertainment, Chris Gorog has held top jobs at industry giants including Universal Studios. He’s also headed up scrappier companies, most recently Napster, which he and his team rescued from bankruptcy and sold to Best Buy two years ago for $135 million. Born in France, but based in Los Angeles, Gorog is an entrepreneur at heart.

But his version of a startup is definitely not two guys in a garage. He thinks big and relies on a big talented team to execute his vision.

For example, in 2001, he spearheaded the effort to spin-off Roxio, a pioneering company that makes software to burn CDs and DVDs from Adaptec. When the deal was complete, Gorog hired more than 100 people right away. Early in his career, he ran a film production company, boosting revenues from $30 million to $150 million—with the help of 150 employees.

He is well aware of the challenges big corporate executives face when they decide to step into a much smaller company. “When you are working for a large corporation, it’s very comfortable,” said Gorog, who is enjoying some time off after completing his Napster management contract in January, 2010. “A big company can absorb inefficiencies and mistakes. If you are the decision-maker at a small company, the stakes are much higher.”

Big company CEOs are trained to delegate. Small company CEO’s are hands-on. For many former corporate executives, working at a small company is daunting. “The single most challenging thing for people running a small business is that there are always 1,000 things you could be doing every day, but you need to focus on the key 10 things.”

On the plus side, Gorog said he really enjoys being closer to his customers while heading up a small firm. “You have to think about making customers the co-authors of your products. You can do this by being in constant conversation with them.”

He believes one key to his personal and professional success is being able to combine the discipline of what he learned from big organizations with his entrepreneurial spirit. One thing big company executives do is set benchmarks and hold employees accountable. He thinks this is a good idea for smaller companies, as well.

Achieving benchmarks is definitely top of mind for Kanchana Raman, founder and CEO of Avion Systems, Inc. in Atlanta, Georgia. A former software developer for Sprint, she founded a  telecommunications and technology services company in 1996, just in time for the dot com boom. Sales took off and within the first 18 months in business, she had clients in 16 countries.

Avion provides innovative technologies to move massive amounts of data for clients including AT&T, Ericsson, UPS and other Fortune 100 companies.  Her company focuses on a protocol called “long term evolution” or LTE, which allows consumers to download giant files in record time. The privately-held firm does not release financial information, but she said sales are in the millions.

“We have always hired people from big companies, even when we were a start up,” said Raman. “The biggest advantage is they are very well-trained… They think big, dream big and have a big vision.”

One downside is that the sales people and engineers she recruits mostly work for global companies with established brands. “They are used to working for IBM or AT&T, so when they went out to sell [their products], they didn’t need to talk about the company at all… they just needed to sell the value proposition.”

She makes sure new hires can easily explain why potential customers should do business with Avion and not a more established competitor. Although she started out small, Avion now employs 200 people in the U.S., 40 in Canada and 400 in three cities in India. Avion also has an office in Sao Paulo, Brazil. Raman is an active member of the Women’s Business Enterprise National Council (WBENC), a Washington, D.C.-based group that certifies women business owners.

People she hires from much bigger companies express their appreciation for how creative they can be and how quickly new ideas can be implemented. “If someone has a good idea at a big company, it will take forever to get it approved,” she said.”Here, they have access to the decision makers. We can approve purchases quickly, so if you need a $1 million tool to do a project, we can approve it in 24 hours.”

She attributes much of her success to hiring top talent from her clients’ companies—with their permission. That way, she can align her company’s culture with the culture of the companies she serves. “The biggest thing new employees bring is their relationships and the culture.”

Truly understanding a company’s culture is critical to success, especially for executives transitioning from big to small firms, according to Lawrence Gelburd, a music producer and consultant who teaches entrepreneurship at the University of Pennsylvania’s Wharton School.

Before an executive accepts a new job, he urges them to carefully examine the company’s DNA. “Do people work nine to five? Is there a dog in the office? Do they believe that if you don’t come in on Saturday, don’t bother coming in on Sunday?” he asks.

After graduating from Brown University, Gelburd and four colleagues founded a high-tech company in Pittsburgh with $7 million in venture capital. Although he has an engineering background, his passion for music eventually prompted him to get into the industry as a record producer. (His music industry nickname is “Gelboni.”) Along the way, he earned a MBA from Wharton and was invited to join the faculty as a lecturer.

Gelburd encourages his students to do pro bono work as a way to learn about a new industry. “Get yourself out there as an advisor,” he suggests. Adding that networking—in person, not online—is the best way to find a new job or a business opportunity.  “Get out of your pajamas… stop Googling and start Schmoogling.”

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